– October 7, 2019
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Private Club

In a recent civil but vigorous discussion about immigration, a friend attempted to justify immigration restrictions by analogizing democratic countries to clubs. “Just as a country-club’s members choose who to admit into their club and who to keep out,” he reasoned, “a country should behave similarly.”

I’ll not here debate the merits or demerits of more open immigration. But I will challenge the notion that a country is analogous to a private club.

It’s not. A country is not even close to being like a club. While the analogy seems superficially to be powerful, it’s fraught with all manner of mistakes and dangers.

Private Clubs as Voluntary Associations

Private clubs are commonplace because they are quite useful. By pooling resources and efforts, each of us can often jointly achieve desired goals with greater reliability and at lower costs than if we each undertook to achieve these goals acting alone. While each family could satisfy its members’ desires to swim by building and maintaining its own swimming pool, many families choose the lower cost and more convenient option of sharing with other families a swimming pool by joining a community pool club or a country club.

While some clubs are more formally organized than others – the Detroit Economic Club has written rules, unlike the typical neighborhood book-discussion club that governs itself only with unwritten rules – every club is privately organized and operated to pursue some goal shared by its members. The club members themselves, according to the club’s rules, determine both the size of the club, who may and may not join and on what terms, and how the club functions.

In order to learn and take account of its members’ individual preferences, each club has some decision-making rule. While these rules differ across clubs, many clubs use some version of voting, and very often this version is simple majority rule. If the question, say, is how to spend some portion of the club’s money – Should the money be spent to repair the club’s boat, or instead spent to help members pay for a weekend camping trip? – a vote is taken and the winning option is the one that receives a majority of the votes.

Given that no one is forced to join, or to remain in, any club, it’s fair to say that each club is optimally responsive to its members’ individual preferences. If Smith’s preferences are inadequately satisfied by her membership in a club, she either doesn’t join or she quits that club. Therefore, even if Smith voted in the minority on some particular question, she will remain in the club as long as she believes that, overall, the benefit to her of being in the club is greater than the costs she suffers on those occasions when a majority of her fellow members choose some particular course of action different from her preferred course.

No club will retain adequate membership if individual members’ preferences are consistently ignored and unsatisfied. Because of individuals’ freedom to join or not – and to quit or not – clubs that operate according to decision-making rules that give inadequate voice to each member don’t survive.

Clubs and Country

Any examination of clubs beyond the utterly superficial reveals the flaws in analogizing citizenship in a country to membership in a private club.

The most obvious difference is that citizenship in a country isn’t voluntary. Each private club we join is joined explicitly and voluntarily, and each club member remains so only by his or her actual consent. No one finds himself or herself a member of a club as a result of force or happenstance.

Also, each of us can easily choose to be a member of no club whatsoever.

Matters are very different with citizenship, even when we confine our attention to democratic countries. Although sometimes citizenship is actively chosen – as when someone born to non-American parents in France moves to the United States and obtains American citizenship – citizenship typically isn’t actively chosen; it’s an accident of birth. Most citizens are initiated into the club by circumstances beyond their control. 

Moreover, no one can practically choose to be a citizen of no country. Opting out of citizenship altogether is not a realistic option.

Furthermore, to renounce citizenship in one country not only practically requires the costly process of obtaining citizenship in another, such renunciation entails a much broader range of sacrifices than those entailed when someone quits a club. If I relinquish my gym membership I don’t thereby sacrifice my ability to visit my son at his New Hampshire home whenever and for however long I wish. Not so if I relinquish my American citizenship.

Speaking of American citizenship, the U.S. government imposes by statute additional high penalties on Americans who choose to give up their memberships in Club America.

First, the U.S. Department of State charges to every American seeking to renounce citizenship a fee of $2,350. Second, for another sizeable set of Americans – especially, but not only, each American with a net worth of $2 million or more – the U.S. government imposes an “exit tax” (formally called an “expatriation tax”). As described by Robert Wood writing in Forbes: “The Exit Tax is like an estate tax on the gain [in value] in your assets, even though you are not actually selling anything. It is the IRS’s last chance to tax you.”

And if that’s not bad enough, here’s yet a third additional penalty, as explained by the IRS itself: “Further, expatriated individuals will be subject to U.S. tax on their worldwide income for any of the 10 years following expatriation in which they are present in the U.S. for more than 30 days, or 60 days in the case of individuals working in the U.S. for an unrelated employer.”

Because membership in a genuine club is voluntary, citizenship in the U.S., despite its democratic demeanor, is not remotely akin to membership in a club.

Democratic Form Does Not Guarantee Democratic Substance

Another major difference between private clubs and national citizenship was alluded to above: private clubs that grow too large to give each member adequate voice either shrink or dissolve. Whatever is the particular decision-making rule used by a private club should therefore be assumed by third-party observers to be the rule that best elicits members’ preferences without putting excessive burdens on their time and resources.

The same cannot be said about decision-making rules in political society. It’s a grave error to suppose that just because the typical private club is successfully governed using majority rule, that a sufficient means of assuring successful governance of a nation – governance that is in the best interest of citizens as a group – is for political society to use majority-rule voting. As the size of the decision-making group increases, each person’s vote matters less. At some point, the number of voters is so large that it becomes ludicrous to describe any one voter as having a meaningful voice in governance.

If citizens could, like members of real clubs, easily opt out of their citizenship – including opting out of their ‘duty’ to pay taxes and to obey other state diktats – decision-making rules in political society would adjust to better ensure that each citizen has either a meaningful say in the rules by which he or she is governed, or that he or she isn’t unduly imposed upon by fellow citizens. To achieve these ends, either the size of the polity would shrink or, more likely, the range of issues subject to collective choice would narrow.

But no such easy opt out of citizenship is available. This reality alone is sufficient to discredit attempts to analogize countries to private clubs.

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Donald J. Boudreaux

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Donald J. Boudreaux is a senior fellow with American Institute for Economic Research and with the F.A. Hayek Program for Advanced Study in Philosophy, Politics, and Economics at the Mercatus Center at George Mason University; a Mercatus Center Board Member; and a professor of economics and former economics-department chair at George Mason University. He is the author of the books The Essential Hayek, Globalization, Hypocrites and Half-Wits, and his articles appear in such publications as the Wall Street Journal, New York Times, US News & World Report as well as numerous scholarly journals. He writes a blog called Cafe Hayek and a regular column on economics for the Pittsburgh Tribune-Review. Boudreaux earned a PhD in economics from Auburn University and a law degree from the University of Virginia.

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